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Retiring Boomers Shape Up as a Bonanza for Home Builders
As the U.S. housing economy struggles to regain its footing, one noted economist who has studied the mature market for more than a decade, says builders who focus on serving the needs of the nation’s 76 million baby boomers are in the right place at the right time.
Gene Warren, president of Phoenix-based Thomas, Warren + Associates, predicts that more mobile retirees will create a demand for 11 million homes during the next 22 years.
Warren, whose firm completed groundbreaking studies of the economic impacts of the mature market in Arizona in 1998 and in Florida in 2002 also noted that his demand numbers could double if workforce housing for those workers serving the retiring baby boomers were factored into the equation.
“All of the studies and migration data we have reviewed points to a dramatic increase in the rate of migration among baby boomers,” Warren said. “While less than 10% of the previous generation, the boomers’ parents, relocated after retirement, we’re looking at a number that could exceed 20% when it comes to boomer migration. This generation has traveled more and is much more experiential in their lifestyle pursuits and as a result, they will be on the move,” he said.
Warren says that if 20% of the nation’s 91 million Americans between the ages of 43 and 64 relocate as they retire during the next 22 years, more than 18 million mature Americans, equal to 11 million households, will be on the move and looking for lifestyle-oriented housing.
According to Warren’s calculations, in 2007 there were approximately 2.25 million homes occupied by relocated retirees. Even when factoring those existing households into his demand model, Warren says the U.S. housing market will be 8.75 million units short of serving the demand he expects to be created by relocating baby boomers.
“These statistics and trends bode well for home builders who understand how to attract and serve these future retirees,” Warren said. “In recent years, not only home builders, but also municipalities have gotten into the business of retiree attraction. As these forces converge, we may very well see many new retirement meccas emerging in locations all across America,” he added.
In addition to performing economic analysis and market evaluations on the mature market, Warren has consulted with communities in Arizona, Nevada, South Carolina, Georgia, Louisiana, and even in Mexico, on the subject of retiree attraction.
Warren goes on to predict that more than 16 million jobs will be created in the communities that are successful in attracting boomer retirees during the next 22 years, spurring demand for another 9.5 million new homes to accommodate these service providers.
“The bottom line is that the emerging aspirations of an affluent and more mobile baby boom population will have a dramatically positive impact on the housing industry for decades to come,” Warren said. “In totality, boomers will create a demand for almost one million housing units a year and we should see this trend build quickly after the excessive building of the early 2000s is absorbed, and an ever increasing number of boomers enter the retirement phase of their lives,” he said.
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 CAASH in on Boomer Buyers
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